A club of six South Korean investors has bought Commerzbank’s Gallileo office tower in Frankfurt for about €270m.
The club was put together by IVG Immobilien, advised by CBRE, as part of a drive by the German investment manager to broaden its investor client base.
Mark Evans, head of equity placement in CBRE’s London office, said it was the first investment outside their domestic market for most of the pension fund and insurance company investors, but “one or two” had invested in London.
The acquisition has been geared with debt at a loan-to-value level of about 50% from a German bank, which is believed to give the investors a cash-on-cash yield over 6%. Commerzbank leased back the tower for just over 15 years.
“Bringing in new investors is not a fast process; we worked closely for 12 months with CBRE’s Seoul office” Evans said. The investors bought the asset via local asset manager Hanwha.
Asian investors continue to target European property; Malaysian infrastructure company AlloyMtd bought One Crown Place, EC2, from UBS this month, with consent for a 380,000 sq ft development.
Listed IVG is locked in restructuring talks with its creditors over €3bn of debt that matures this year and next and has warned investors it may involve a debt-for-equity swap.